1. (C) From April 19 to 22, Italy's Democrats of the Left
(DS) and the Democracy and Liberty--The Margherita (Daisy)
parties held what were likely their last respective party
congresses. Both parties announced their pending dissolution
and intent to jointly constitute a new Democratic Party (PD)
in the spring of 2008. Serious disagreements about the
future suggest the PD birth will not be easy. Nevertheless,
it could introduce a new center-left force and bring more
stability to any future center-left government. In the short
run, it will increase pressure for electoral reform (SEPTEL),
a politically tumultuous process. END SUMMARY.

2. (C) From April 19 to 22, the Democrats of the Left (DS)
and the Democracy and Liberty--the Margherita (Daisy) parties
held what were likely their last respective party congresses
(REF A). Both announced the dissolution of their parties and
intent to jointly constitute a new Democratic Party (PD) in
the spring of 2008. DS/Daisy leaders claim formation of the
PD will create a powerful force in the center-left that will
bring more stability to future center-left governments.
Though heralded as an historic achievement (the first time
two major Italian parties have decided to join forces), the
decision was greeted with concern among many in the party
rank-and-file and with apathy among the Italian public.

3. (SBU) With party delegates chosen and issues hashed out in
advance, most decisions were known before the actual
congresses began. Piero Fassino was confirmed as DS Party
Secretary and Francesco Rutelli was re-elected Daisy

SIPDIS
President. This cable: 1) highlights both conferences, 2)
discusses challenges to the creation of the PD, and 3)
discusses implications of the PD for the Italian government.

CONGRESS ATMOSPHERICS
---------------------

4. (C) DS CONGRESS: The DS congress was a nostalgic affair
with leaders recalling various periods of political
transformation, especially the dissolution of the former
Italian Communist Party (PCI) in 1992. Fassino delivered an
all-inclusive 90-minute justification for the PD, and the
policies he would like to bring to it. Fabio Mussi, leader
of the left wing ""correntone"" of the DS, confirmed his
opposition to the PD and his departure from the DS in a
speech laced with leftist rhetoric. Rome Mayor Walter
Veltroni offered a well-received address that observers say
was the only one with a vision for the PD and which confirmed
Veltroni as a potential PD leader. The enthusiastic welcome
for FM Massimo D'Alema demonstrated his firm position as the
DS heavyweight.

5. (C) DAISY CONGRESS: Confirmed as party President, Rutelli
fended off an offensive from conservative former Christian
Democrats (i Popolari) such as Enrico Letta, Dario
Francheschini, and Giuseppe Fioroni. The Daisy conference
lacked the drama of the DS congress, but party infighting was
more apparent. MoD Arturo Parisi left the congress prior to
the final vote to protest the lack of clarity on exactly how
the PD would be formed.

6. (C) While the DS and the Daisy announced their intention
to create the PD, the only other point they agreed on was the
inadequacy of the party manifesto drafted prior to the
conventions. There is no clarity on practical issues such
as: what to do with the two party newspapers; the future PD
party symbol; how local offices would be merged, etc. There
are also several policy disagreements between the DS and the
Daisy parties. The three most divisive issues have been:

International Association: The DS argued forcefully for the
PD to be included in the European Socialist Party (PSE), a
step Daisy leaders strongly oppose. This ""identity"" issue is
essential for party stalwarts in both groups, weary of
surrendering the party soul to former ""communists"" and former

ROME 00000877 002.2 OF 002

""Christian Democrats,"" respectively. A comprise involving a
""soft association"" simultaneously with the PSE and other more
reformist parties appears to be emerging, but has done little
to settle DS fears that the PD will be too moderate and Daisy
concerns the PD will be too leftist.

Christian Identity: The core of the DS party is secular with
a strong anti-clerical faction. Calls for support of gay
marriage and diatribes against the Vatican's interference in
Italian politics received strong approval from DS members.
The Daisy Party includes many former Christian Democrats
closely linked to the Vatican who are inflexible in their
opposition to gay marriage.

PD Leadership: A consensus has emerged that PM Romano Prodi
should be the PD Party Leader until his announced departure
at the end of the current legislative period (2011, according
to Prodi). However, there is no end to the list of aspirants
for leadership as soon as Prodi leaves the scene, and the
Daisy is particularly concerned that the larger DS will use
its more-organized party structure to dominate the Daisy
party in leadership contests.

THE PD: LOOKING LESS THAN THE SUM OF ITS PARTS
--------------------------------------------- -

7. (C) For the time being, the future PD appears to be less
than the sum of its parts. A few days after the DS Congress,
left-leaning DS leader Gavino Angius also announced his
departure from the DS over the creation of the PD (REF B).
Together Mussi and Angius received 24.4 percent of the
leadership vote at the DS congress, compared to DS Secretary
Piero Fassino's 75.6 percent. Ten Senators and 22 Deputies
are expected to join Mussi and Angius in opting out of the
future PD. Moreover, the DS and Daisy are suffering in
opinion polls for their association with the radical left, an
association they are unwilling/unable to break.

8. (C) COMMENT: Having publicly committed themselves to the
PD, will not turn back. Consolidation of Italy's numerous
parties on both the left and the right would be a positive
step for political stability, and the PD has potential to
spur that development beyond the DS/Daisy merger. However,
the process will be difficult, possibly longer than
predicted, and could leave serious political turbulence in
its wake, as has already been seen. Stability in the next
few months may turn on electoral reform (SEPTEL) and related
maneuvering in Italian party politics. END COMMENT.
Spogli
"

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